Xcel Energy is a step closer to having ratepayers pick up the $44.5 million tab for its smart-grid pilot project in Boulder, but it still faces opposition from businesses and consumers.

The Public Utilities Commission is set to rule by mid-December on a recommendation by Administrative Law Judge G. Harris Adams to accept a settlement agreement giving Xcel the $44.5 million.

SmartGridCity is designed to better manage electricity distribution and give consumers detailed information about their usage.

When Xcel began the pilot in 2008, it estimated the total cost at $100 million and the company’s share of that at $15.3 million. The rest was to be paid by companies partnering in the project.

In the past two years, Xcel’s share has tripled as it has run into added expense in laying fiber-optic cable and installing software.

The settlement among Xcel, the commission staff and the Governor’s Energy Office allowed the utility to recover the $44.5 million it has spent — but no additional capital expenses.

The settlement was “prudent,” Adams said.

Still, the PUC is being urged to reject Adams’ recommendation — in full or in part — by the state Office of Consumer Council, mining and steel companies, and a citizen intervener in the case.

The judge “reached the wrong decision,” Climax Molybdenum Co., which operates a mine in Empire, and Rocky Mountain Steel of Pueblo, said in a filing to the commission. The mill and the mine are Xcel’s two largest customers.

The two companies contend that the pilot is a research-and-development project and its full costs should be borne by Xcel shareholders, not ratepayers.

“The company changed the project on-the-fly during implementation, and many of those changes created significant costs,” the companies contend.

In its 2009 rate case, Xcel asked for and was granted $27.9 million in SmartGridCity costs. The OCC says that is all the company should get.

“The idea that every cost is just passed through to consumers is something we have trouble with,” said Bill Levis, director of the OCC.

“The company’s decision, in March of 2009, to go forward with the original scope of the project rather than moving to a modified scaled down scope was imprudent,” the consumer counsel said in a filing.

Leslie Glustrom, a citizen intervener and Boulder resident, asked the commission in a filing to include only $4.6 million for one substation.

Glustrom faulted Xcel for “making grandiose claims to the Boulder City Council, but then not delivering on these presumed functions of the SmartGridCity project.”

Xcel is hoping the PUC approves the administrative law judge’s recommendation, said Xcel spokeswoman Michelle Aguayo.

“We really hope to show the value of SmartGridCity will provide to all customers in Colorado,” Aguayo said.

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